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  CSPAN    Capital News Today    News/Business. News.  

    October 10, 2012
    11:00 - 2:00am EDT  

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face off in the only debate. abc news moderates from centere college in dan ville kentucky. . .acacacacacacaaac
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>> ceo jamie dimon spoke about the global economy and foreign relations today as part of their ceo speaker series. it is virtually assured that bond markets would project the rest out of congress could not reach a deal cutting the deficit. jpmorgan is being sued at the new york attorney general over allegations that subsidiary bear stearns deceived investors into buying mortgage-backed securities. this is an hour. [inaudible conversations]
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>> well, good afternoon. i am richard haass and i want to welcome all of you to the council on foreign relations into today's ceo speaker series meeting. this is part of the council on foreign relations corporate programs, which is supposed to increase connections and links between the business community in the foreign policy community, which to some extent are one and the same. i want to thank -- rather welcome not necessarily those of you do, but those around the world participating in this meeting or modern technology. speaking of modern technology, if people take a second to turn off their cell phones and the like, that would be most welcome. this meeting is on the record.
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as we say, anything can and will i'm sure be against you. in this danish, probably some things you haven't said will be used against you. the phrase for someone it's no introduction as often is. in this case it applies. jamie dimon is not simply the head of one of the principal financial institutions in this country, jpmorgan chase, but i believe has emerged as one of the most important and influential spokesman to the world of finance and business in the united states. the wait is going to work today to see and i are going to have this conversation for a few minutes and then we will open it up to you for your questions. one or two conflicts of interest in the table. jpmorgan chase is a corporate
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member of the council on foreign relations. whenever a 175 corporate converse amanda shareholders the company. i'm forsch landed distinct minority shareholder and i wish it weren't have to present a conflict, but alas it's not. so there you go. mr. dimon is suspect and if you know is that greek heritage. in the last 24 hours the chancellor of germany has been visiting the country of your ancestors of their forebears. how worried are you and what it might mean, not just for grace and not sonatas for europe, but because of globalization and economic linkages for the united states and for your own institution. >> thank you for your introduction. my ancestors 1915 chemists you can't blame me for what's going
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on there. as a sidenote now, meant my grandfather coming home years ago and greeks from both sides yelling and screaming about the then prime minister who is the grandfather a while back while backyard in almost the same points. socialism, capitalism, same day sky. so the issue obviously to succeed and survive, but from an economic standpoint, greece is not the issue. greece is a couple hundred billion dollars in debt on its own isn't a catastrophe. the catastrophe is to have the defaults increase before you have a firewall through italy and spain. in a very good likelihood italy and spain don't have the wherewithal to stop the banks. they need the money if they can't print euro. they are things called central banks, but they can't print euro from which has been a difficult position and that's why you need a banking union and fdic deposit scheme.
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$700 billion has ended up in spain. most went to germany. the german bank deposited in the bank to lend back to the time spinner central banks. so the problem has been widely socialist inside europe counter to what most people think. so to solve europe would need three things. you need to stop the banking crisis in spain. he made a real fiscal union. they have one that doesn't work. it was really a minority. they've got to do it soon because it's bleeding slowly. i do want to remind you who are really good reasons for the union. wise political and hundreds of thousands of users have multiple wars. so you could really say let's have a political union. the second was economic, market and a look at the united states and say we have a common market.
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state state regulation come the same old-school stuff like that, but it was a huge boost the economy. those reasons still exists. i personally will muddle through potentially so bad and policymakers know that. i could be wrong. you're going to see goodness, badness, it is going to her, not going over. but they can't do them all once. they have the will. all the politicians say there is no plan b. the way is really complicated. >> i expect we'll return to that , but let's just keep globetrotting for a second. even at the international financial meetings in japan and one of the things coming out of the imf predictions for slowdown in global economic growth. announced this morning to chop off as global demand for aluminum, which is something of an indicator. are you seeing the same thing or
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business operations? you're truly an international institution. are you seeing signs of a slowdown? the mac not quite like that. europe is a mild recession. you could argue not worse, but the government has spent 50% of the money. in asia is slower but nothing mystical or different than the newspapers. the united states is fundamentally stronger than people think much of the reasons for that a little bit later. in latin america, you know, some groups are slower, but obviously a slowdown quite a bit. >> in a show you seem sanguine about peer what about india slowing, china slowing, china slowing, china slowing and they're going they're going to need to check its good remember is to be a lot higher. they need the 7% or 8% to avoid
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the social unrest and to build the infrastructure. i think they're going to need that. they're going to change the leadership to be smooth and will continue former policies of the government, but they have the wherewithal. so they've got $3 trillion in reserves and capability to maintain. they move very quickly. so the stimulus package after the crisis they think was like seven months after the crisis, they did in fact, literally. so they know what they want to accomplish. i don't believe china can do that 10 years from now. now they have to micromanage in the infrastructure buildings still works. i think down the road to work for the next couple of years. >> are you as bullish about latin america? are you seeing the signs are pretty robust economic? >> we are opening offices and we do business in a lot of
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countries, but were on the ground. in sub-saharan in uganda and kenya. member, we go there for the multinational declines. when they go, we go. it's a mystical type of thing. it's optimistic, they say might latin america. so peru and chile is doing fine in brazil is a slowdown, but will make inconsistent investments in mexico also rethink is doing quite well. so our neighbors to the south to a better job of fiscal deficit, better job of monetary policy and create jobs out there. so we should help as much as we can on the trip problem happening. >> implicit in a lot of this -- a lot of which are seen as one actor wrestle the united states associate is so let's turn inward. how worried are you and how much are you planning for the fiscal
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cliff? >> that's a big deal to win the euro zone crisis happens in the debt ceiling crisis, we spend 50 to $100 million because of the complexity in global financial markets if you had a real failure. the fiscal cliff isn't quite that because it's more predictable, but we have a fiscal cliff, command center and all that kind of stuff going through to understand all of it. will be prepared. jpmorgan survived the fiscal cliff and i just think it's terrible policy to allow us to get close. the reason i think if that is because i read the papers and someone said it's not that bad. just a mushy bp. i would defy anyone of you to know what they are. therefore as a responsible policy to say well, let's see. let's not say. let's try to avoid that.
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one have been midnight december 31st. it's going to happen now. people will say this is bad and start to make decisions, don't hire, don't build, don't buy. let's wait and see. that is a recession. people pulling back a little bit. >> you agree people who say it's better to describe it less as a cliff than a slope? >> it will be a slope. >> imagined it to the fiscal cliff because we talk an ominous still another because congress finds a way to kick the proverbial can download a. how willing are you at some point that the united states can't do something on the order of a simpson/bowles for trying dollars over deppe said deal. how worried are you monday yurika and suddenly you're about area or iphone is red hot because the bond markets essentially meant against the united states? >> it is virtually assured.
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the question is when and how. i don't know if it's two years or five years, but it will happen. it's a matter of time. the united states can't barret definitely. look over the 100 years, bankruptcy in country after country who just thought they could get away with the reserve currency. again, what you take that of wait and see? were going to have fiscal discipline. it was imposed upon us and we did everything. we do to ourselves the right way. we in a way could enhance growth and jobs. so if we did some bad like simpson/bowles, whether as a year year ago whatever, the economy would boom. and we are showing that we have the ability. i would say americanness the way. as the well, but does know the way. more efficient tax system would've created much more
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certainty and a whole bunch of policy. i still think it's doable. the leaders need to say we're going to do it. >> when you think of the outlines of something like simpson/bowles for sure and has to include something is entitlement reform, spending control, tax increases? >> most businesspeople are not partisan, not parochial. we can all spend 20% of the government. i think simpson/bowles is 21%. and none have an system. so simpson/bowles is a far more efficient tax system that gets this huge waste, fiction costs in our society, legal system, uncertainty. so yeah, we would have had better growth and simpson/bowles was four for one or whatever, close enough it would've been good enough. if you get the growth going
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again, gross people out. >> let's talk about gross. the united states has been out for several years growing at roughly half which you might call the modern historical rate and set up in mid-30s, we are courageous below to give her a tape. if you are advising the next president, be it mr. obama or romney should more probably make the case publicly, here's a couple things to generate double or rate of economic growth say a 3.5%. one would be a comprehensive budget deal. what else would be on jamie dimon's list? >> when they give you the big picture about america, this great country of ours. the president recognized one thing for certain. they're going into that office with the world straight fresh. how terrible that america, it's just not true. those of you travel around the world have the best military in
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the family i transplantable for years. i'm talking about a venture capital, private equity, markets and bond markets. we have among the best businesses on the planet. small, medium and large with one of the most innovative entrepreneurial country around. i'm not talking about steve jobs. steve jobs. all in on the fact, steve jobs, you name it. we invest more capital equipment. we have a good rule of law, no longer the best. we still have a work ethic bear. if you're going to invest one place in this planet, it would be here. so we've got to get beyond. we don't have the divine right to success. we got to get immigration rights, fiscal policy right, otherwise it's another gift call shale oil. my god, the most profligate energy nation the planet.
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kaaba tenants that i know you miss it all that energy. were going to give you one more shot. let's hope you do this one right. so we have a problem. we should diagnose the problem. if you look at america today, why are we going to 2%? this one i can't prove. but i believe that europe isn't going to sink us, but there's a huge wet blanket out here in the wet blanket to name resolving uncertainty, real insurgency on taxes, policies, fiscal cliff. we have this constant business, not just a minute, the regulatory bee gees. i travel around america. wherever i go come businesspeople are faced terrible. we've done it to ourselves,
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folks. get rid of that wet blanket and it will take off. there's a great article that someone reprinted in "the wall street journal" was george shultz and milton friedman who gave president-elect to bomb us some. can system taxes, consistent regulatory. so the same positive story over and over and it will turn. you've got to believe in that, so america will do the right thing after its exhausted all the possibilities. i hope we do. the important partisan washington, if you think washington and business go to work with each other, terrible idea. collaboration should've happened. we should've had collaboration. we were in a crisis. every business wants to get things done, to pull together, worked round the clock, but it became a war. dodd-frank and health care and
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service edition of the wet blanket in the benefit to get a right the first time in move on. >> let's transition to that peer to the extent there has been a market absence of collaboration were significant friction, you would put the lion share responsibility on the political side? >> i would perform the business side because the prt, the business ceos come everyone i know says the committee to help? the councils coming meetings. now even wanting for the first time, but someone asked a question, is a 100 twentieths years in big companies come into your universal health care for american citizens, 80% said yes. they want it done right or a certain way. but there was a huge effort to pull together as americans make this work. and it didn't happen. you know us well as i do, but it
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didn't happen. it still could happen. so let's do it again. let's try again. we were to ourselves to do the best we can. >> one error you know better than i do than i do is regulation and regulatory policy. so that they put that out there. historically off the pendulum swings or something of conventional wisdom that pre-2008 the pendulum has swung too far in the direction of hunger regulation and the danger is obviously after to fascinate is one school side that it's going, the second still hasn't gone far enough. where do you come in? >> when i read a lot of people but deep opinions of little knowledge, a lot of them use a democrat trying to justify what they thought, which is not the way to compete with policy. as the clear, when it could regulation in america. good doesn't mean necessarily more or less. it just means good. highways post 65 miles an hour. you can't drink when he tried.
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the circuit is done properly. in some areas we created such confusion of overlapping jurisdictions, no way to adjudicate disputes. people do come that fraud. they make mistakes, tacked by seven different agencies is supposed to the one responsible for it. so we need good policy. clarity, simplicity. so a lot of people need more. they're saying they need more capital. okay, fine. let's have the debate and look at the facts. i've always been in support of a lot of capital. i want players going to go to five. i think some of these laws are written in basel. not written here, not good for america. they are for other people for their purposes and regulators say we have to have a common we want to do it right. i agree with that concept except it's bad for america.
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the rest of the world can't make heads. if you look at somebody's rows, you say that makes sense for this country. >> what about the poster child, the poster issued the proprietary trading in the poker room all that? would you come on i'm not? >> so after dodd-frank was mostly done and come after the and white paper and after ever went through their 2 cents in, then the volcker was going to the top. totally necessary. but that wasn't the problem. if you look at dodd-frank, we support good pro forma. they were democrats that make it binary. you either for or against it. i'm for some and again son. nothing to do with crisis. they had nothing to do with the poll thought deeply about.
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keep trading for big financial countries. i agree with that. we have to get rid of too big to fail. so i agree with the intent. what i have said is we have the widest, deepest, best, most transparent markets in the world. you can price almost anything a little blackberry with pennies. let's not throw the baby out with the bathwater. the struggle is trying to find market-making volcker and you almost can't. it's so big it's hard to determine what is market-making. so i just hope we write it in a way that will end up with the and best capital markets in the world yet that's what i hope. what happened as the regulators came out with 180 things with 18,000 from around the world. not just american investment banks, but around the world,
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asset managers, central banks,, governments get it right. at what point has got to be a dialogue. >> in general, should most regulation come from the outside portion firms essentially have a large troll so long as it's transparent? >> you should have regulation formed and designed. right in this crisis because banks are blamed for everything is keep an eye the process. and that's kind of a mistake because that's like if you design a hospital, keep the doctors out. of course banks make mistakes. they should be punished. it would've been better to sit down and have the conversation designed the system went about doing, which is people dumping 2000, 5000 pages of roaster and figure out what they need. some of these roles by the way, there is a great economic ecosystem for all different
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types of entities. small banks, big name. this banks in 50 countries. that's why were here. to do a lot of things other people can't do. some of these roles are terrible for banks. i say that because i don't want them coming after me with small banks, but he was the biggest bank of the banks? >> let's talk about that. you mentioned too big to fail. there is talk to chew it to be broken up and if you did get into serious financial distress that they would be system threatening, goes way beyond the institution. how does one deal with that? other than people having tremendous states are one-day or successors, how do we do with the problem that jpmorgan never made an institution as the threatening mistake with the ratifications would be far better. >> when people talk about class to go, this crisis had nothing to do. you may remember hedge funds had problems early on, mortgage
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brokers for saving someone's went bankrupt. penny not come along now, monoline investment banks, lehman and bear stearns, aig life insurance company in the biggest thing he shook a tester of all-time call fannie mae and freddie mac all have been way before that day. so was in a glass-steagall foundation. number two, we have to give credit to big to fail. if i send another sick of them i am, you should never pay jpmorgan fails. you need a way to bankrupt. they should be called minimally damaging bankruptcy for big banks as opposed to this fake concept of orderly liquidation. kind of something to resolving us, but we may still be around. i think it should be called bankruptcy. any specialized staff peer jessica hospital when it goes bankrupt and you can't turn the lights off, financial company
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all you need is turning to the system. it could be done. in fact it was quite successful by the fdic for a long period of time. so i think there's phrase you want to structure so the regulators say that jpmorgan starts to fail and missile chapter 14 commanders that happens with the money keeps on moving. equity holders pay everything. if there's any money left when jpmorgan is $400 billion of equity unsecured debt. there's no way were going to lose all that. but if it did come though chargeback to the big banks, just like fdic today. so citizens never pay. also i think with that failure happens, all callbacks revoked, all directors fired in the name is buried forever. so we remember why they should have been. so it shouldn't hurt the economy and stuff like that. so those are what they should be
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doing. like i said, if jpmorgan, presumably the reason companies get bigger if they offer big declines, but better, faster, cheaper. that is capitalism. productivity, and you buy it because you like it. you go to wal-mart because you like the price. just like the price. nothing wrong with that. it's reasonable. i tell people we didn't have productivity would all be living in buffalo. that's what creates this great economy of ours. sometimes issues lose and something still surprised people would look what has happened over hundreds of years. it's a wonderful come a beautiful thing. we've got to give it a too big fail, this one i do think doc frank has the element embedded in the companies compete in the marketplace.
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>> implicit or explicit in what she said as you're not going to get to that point. obviously several months ago you had derivative six variants subject in part of "the new york times," the profile and all that. what is different about risk management? what are the lessons learned and changes implemented? >> this company, jpmorgan chase went through 06, 07, zero wait, all night, 2010, 21, 2012. never lost money, didn't a t.a.r.p. and was therefore a lot of people in california, jersey, illinois, schools, businesses. we bought one for ourselves and were able toprice 15,000 to 20,000 jobs in a tremendous cost on the fdic, which is passed back to the banks. so they made a error. we had a gap in the line. we didn't have this gap elsewhere.
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we had other flaws elsewhere, but we screwed up. that quarter last $5 billion. but it was an error. it was intensely. i should have caught it also. if you have a hundred $50 billion of capital, analysts have a set a record year's third year ago. that's our job. ..
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only academics and politicians are not allowed. [laughter] >> i will take that last comment personally. [laughter] why don't i open it up at this point? i have one or two at the end i want to close with, but let me open -- wait for the microphone and let us know your name and your affiliation. i see a gentleman right back by the microphone. yes, sir? >> father and your from the monastery in -- in august the economist reported that the roman catholic church spent approximately $171.6 billion in 2010, about
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18 billion of that was financed through municipal bond purchases. what is jpmorgan doing to help faith-based organizations borrow to meet our capital needs over the long-term? right now is a good climate for us for example. my monastery is 1600 years old. we want to borrow now and pay it over time. [laughter] >> it how much do you want to borrow? [laughter] >> what the rate? >> you ask a great question. not for profits and hospitals, i don't know the actual numbers but i would happy to share with you by e-mail and give you a -- to tell you what we can and can't do. that is what we do is advise people. that bank unlike other institutions often has to say no to a client. walmart wants to sell you
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whatever you have cash cash for but a bank shouldn't. we are going to get blame for that too so some say no we are not going to do it and it's not good for you either. just like selling too much liquor to someone or giving them a drink at the bar whatever. send me an e-mail and i will give you all the information you need. >> why don't we take a slightly broader answer to that question and take one minute to talk about your definition and here you are this large organization and you have enormous profits. what is your sense of corporate responsibility? what it is jp morgan defining for itself? >> i've never had a conflict over this. my job is to build a healthy and vibrant company and every community we operate in including greece, italy and spain, 2000 hamlets around the world think we are good corporate citizen. i really do mean that, no different than the corner store. the corner store participates to help the little league or the
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local church to participate to get people summer jobs jobs and a little bit of philanthropy sometimes. we do that everywhere. we do it through the organ -- foundation. we do over $200 million a year. we have programs for global citizen issue which my friend peter scheer started here. we are going to lots of cities to help them grow economically and create jobs and helping environments. we do a tremendous amount for education and veterans. we have hired, and if you're a veteran in this room thank you very much for serving this country, we have hired 4800 veterans this year in the last 18 months or so. there is this thing called 100,000 jobs which we help starting hired 28,000 veterans and we have done 4500 ourselves. while other people are talking, we are doing. before this program we will do
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1000 so we try to participate and to me it's all the same thing, healthy vibrant company, makes it all possible. the dying company, now been it is possible. i will put it in that same thing by the way, people say as an employee or shareholder if i don't make customers happy there is nothing else. if our employees don't do a good job -- it's all important to me. i try to run a fair profit, take care of your own people in your clients. let me go back to the mistake issue one more time. here's a question for you all. we have something like $15 billion in exposure in derivatives and hedging and bouncing around. you could easily tell me get it down. i can get it down and i have to do some tour that is to get it down but on the other hand we have been dealing in spain for over 100 years. jpmorgan himself died in rome
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and loved italy. if you were italy how would you feel is jpmorgan cuts and runs? don't be a fair weather friend. be here in good times and bad times which is what we are doing. to govern in the central bank you to corporations. we could lose five or $6 billion just like that if things go bad. if i am sitting down here and i am sure i will be dragged down to congress again. how could you not acknowledge and what kind of risk managed to do have? we made a decision. it may be the wrong decision but one we made a stupid error. this is deliberate and we are going to stay and hope we will be doing it in 50 years and we know the risk we are bearing right now and we try to moderate them but we need to be a good corporate citizen. if you go-round the world by the way -- i am lucky. the reputation in the knowledge that jpmorgan has end the relationship inside these companies goes back 100 years so we can't cut and run.
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and we are not going to. we will try to manage exposures but we will be long-term investors. >> i will try to get as many people as i can. aberdeen in the front row here. >> i am with the catholic trust group. mr. dimon when you look at jpmorgan and lou preston and jpmorgan, what is the difference and i would like you to comment on the issue of oversight or go i listen to you and he made a persuasive argument that i haven't heard you use the word oversight. >> when you say oversight we have courts and regulators and more oversight than you could probably imagine. we are in a different world and we do the same thing for consumers and businesses. we lend the money and some big -- we raise it in the markets and it is always the same. i want to borrow money for this project we may say your cheapest route is a bank loan and around
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that all these new services called derivatives, 99% of all corporations use them and most of them are interest rates and foreign exchange. it gives people more time to manage their exposures. consumers are the same thing. the other thing for corporations we run your checking accounts. we moved something like five to $10 trillion a day in corporations around the world so it's all systems but is your checking car and. we move it through different currencies through different companies to pay your vendors or go again these are 6000 huge corporations and governments around the world in the consumer's too. we give you advice. when you have savings accounts, checking accounts, investment accounts, mortgages and auto loans that is what we do. those are not going to change 100 years now. you will still need it than -- financial advice as an individual and a corporation. the products may change in the services may change. the oversight, we have a board which is very strong and very
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tough and an indent review of this whole fiasco we just had. we have regulators and the fdic and the fed, insite jpmorgan chase we have every business has a risk committee. 2000 people at risk, 1000 lawyers and 1500 compliance officers? there is huge oversight in the company to try to manage this. what are we doing for them that they want or don't want and then the market is confusion to most people. we make markets in countries, we buy and sell a couple trillion dollars a day. you can go to us in hong kong, london, new york and buy bonds. it can be republic bonds or they could be gm bonds. what you want from us? we are the store. we sell you that.
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like costco or walmart, it's a little riskier than that because it's a little more of paula told business. we do a great job for you and you say oh you guys give me a great price and great ideas and that is way i give you my business and hopefully we will continue to do that. the market making his enter golf to the fact that ibm could call a separate now and raise $5 million in the bond market in ours. they are directly related because we make markets with those bonds and we do research and we have the capability to do it and that is how we can do it. they can issue bonds like that so they are related like this. >> right there in the fifth row. scurrying about with the microphones, that would be good. >> thank you. i'm david and i am a risk and performance manager. here is a way of getting at the question of what makes for good regulation.
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why didn't for dish a live up to the hope that it would keep things from getting in trouble operating between the mortgage markets and the securitization market specs that was the hope and was passed after the thrift crisis and it's probably a good test case because it was a combination of things as i recall. there is a lot of microregulation that drove everyone and one novel idea that a number of bankers thought was interesting which was, let the supervisors, and before equity is entirely gone so they are not tempted to take big risks so why didn't that help forestall the latest financial crisis? >> if you look at the last financial crisis, financial crises are more complex than one thing. we had too much leverage in the system in the mortgage market was polluted. there is far more leverage in europe than in the united states and that is not an accusation in europe. that is the regime they operate
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under both regulatory and political for 30 years. much more stuff done through banking and capital markets so like i said fannie mae and freddie mac were huge dissector and i have yet to see them drag me down. that is going to cost you $200 billion by the way. jpmorgan is not going to cost you anything. i think you should go through all those things and ask what we can do better so what they wanted on oversight could be called fsoc, to adjudicate and also assign responsibility to problems and the people responsible for its. we thought there should be a better bankruptcy failure resolution method for big banks. we have always believed a more capital liquidity. i generally believe in transparency. we thought a lot of derivative should go to bearing houses but again the devil is in the detail folks. the clearinghouse does not eliminate risk. it concentrated in standardizes
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that but if you don't set up the clearinghouse right you will have a problem down the road. yes maam, all the way in the back. >> hi, i am justine underhill for martí. you mention that companies make mistakes and now that there is a civil lawsuit for bear stearns related to related fraud. do you regret participating with the federal reserve to buy bear stearns in 2008? >> we didn't participate with the federal reserve. >> did you miss something when you told investors at bear stearns, the acquisition would not be material? >> i'm not sure i even said that. we were asked to buy bear stearns. the fed did us a favor, no, no, we did them a favor. let's get this one exact rewrite. we were asked to do it and we did a great risk to ourselves and we have the capability in the capitol. it's time for two children's --
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due diligence. all these lawsuits there would be no money and they would be no lawsuits. there would be no stock drop lawsuits in no class-action lawsuits because there would be no money. we bought it and we knew we were buying something -- as a reporter pointed out, i worried extensively about what i have bought their stearns again knowing what i know today? it's really close. bmi of lord would not allow me because you take on these applications. i did get a letter from one of the senior regulators late on sunday night before we signed it that said, please take the consideration. when you want to come after us down the road for something that their stearns did that it is asked by the federal government. about the economic affairs of bear stearns. we have done some great things with bear stearns and some businesses and building and some
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great people and some terrible things and i forgot the exact number but i will say we have lost five to $10 billion on bear stearns now. i guess it's an unfair category. hey, i'm a big boy. i will survive but i think the government should think twice before they punish businesses every single time something goes wrong. >> you said you lost five or 10? >> litigation, write-downs and the finance that the fed did was $30 million in mortgages. we kept the non-investment-grade mortgages. i asked them to take the investment-grade mortgages and i told them for us, we borrow more and we have more leverage. i didn't want to create another -- in the giant place. if you guys hold these things and borrow a 0% you will get all your money back. i said you will get all your money back and you'll make $1 million profit. multibillion.
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>> talk about our wing at 0%. >> i should've negotiated a deal, whatever you get back you have to get to me to pay for litigation costs. next time i will. >> talk about borrowing a 0%. are you worried in your career inflation is going to be the number one issue? >> you talk about planning. again people talk about treasury may move to 175 or 250. i'm worried about five or 10%. this company is prepared for much bigger. not right away. but i want to point out that, they have done a magnificent job and $3 trillion so far. do you want to know what the financial assets of america are? $80 trillion. the reason i pointed out is people have mentioned argentina, runaway inflation.
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what we do is far more stimulus in that. like it was gdp every year in financial assets. i think the economy like i said things are in pretty sad shape. a lot of fiscal monetary's stimulation. we think corporate america has $1.5 trillion too much cash. we consumers if i asked you for a show of hands, how, and if you hold too much cash in your own portfolio? my guess is a lot of you would say yeah. so yeah if you have real growth you will have inflation so i look at the best case worst case. the best case is we start to grow 4% and inflation goes to 3% or 3.5% and the fed will move some of the stimulus and the bond rates 10 will go to five in short money goes to three. that would be great. it's possible by the way. the worst case of stagflation.
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not only are we not growing growing but we start to see inflation and we have had that before in this country. i think what the fed is doing now is good fiscal policy. you all have to get on board without. that is what is going to kill this thing, not the fed policy. couldn't get our act together and controlling our fiscal deficit in the future. >> just talked about the corporation bringing some of the money home. i assume you're in favor of corporate taxation? >> they say well, prove it. it's hard to prove some of these things. i would say you know the book called -- they wrote the book this time that is different and they said a financial crisis is a longtime gain average. if we read the five or six examples it's because of bad policy. i think i would be convinced that ben bernanke jr. will write a book down the road that would say we could've made this better. one of the things is taxation.
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we are bringing immigrants, trained here and we send them back home and driving f. at the margin. some companies earn money and they have to investigate here but if you are building a semiconductor plant or a ship holding plant or at data center or research center does not have to be here. a lot of it, their taxes are lower and they don't have a repatriation tax which is 30 or 40% higher. that is because -- that is not because they are immoral. that is economics. separate morality from economics. set up the economic system conducive to growth, conducive to jobs in conducive to gdp and then we will have a conversation about taxation. i don't mind paying 39.6% taxes. i don't mind if my capital gains are 20%. i want a society that is always getting more akoto portal.
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don't mess up the economic engine that made it all possible and that is the problem. you can talk to business people all day long, kind of anecdotal but it will be academic 10 years from now. the problem without either way, the other problem is they make those investment overseas and those are sending engineers are in india and other people over there and some of them may stay. >> our immigration policy is doing that too. >> theater with capital. since the crisis i have had numerous conversations with people who i consider very intelligent who will say something like this to me. we have to return glass-steagall by instituting the full thing or we have to basically restrict the banks from taking any positions in a variety of securities that are their bread and butter and when i tell them you can't underwrite markets it just passes over their heads. it seems to me that the industry itself and maybe it's because of
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the political band that created the postrecession could do a better job explaining to average americans what their business is. and what you are required to do to make the business work for the customer. what do you think? >> obviously you want to do a better job and everyone is talk about how you can earn back trust and do a better job explaining some of these things. is really a multiple thing because a lot of people don't understand. it's incumbent upon the leaders to make sure we have intelligent conversations and we don't politicize things for the sake of politics. i didn't realize this and -- [inaudible] when every bank, when they said all the banks failed and we bailed out the game is over. that was it. and if you really believe that, then angle is completely justified that predicated on those lies are the events and
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they would have all failed all other things almost defenseless. you almost can't defense yourself at all and those things are true. all the banks would have failed. some of these banks -- jpmorgan is important but so is wells fargo. they did not need t.a.r.p. to succeed her they would make loans and do it they had to do in times of need for america and so it's hard to make the case. i don't know how to do it but i'm not going to give up. i love this country too much. i am not giving up. that is why i did some things like this. my chairman's letter, which i get help from the lady sitting right behind you in fact and my wife, but i describe capital markets. what is market-making? is market-making in lumber, aluminum, brass -- not grass, grass grass. [laughter]
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marketing is making everything. there was market-making in communist china and the soviet union. the markets in cuba. i don't know if people think. you can sell your goods for a better price over here, go over here. that is what people do. that is what each and every one of you would do. it's not like there is a morality without. we are teaching people all the wrong things but banks should be fixed. we should be punished for what we did wrong and the punishment should fit the crime and so we can move on. i do think the american public feels there is no old testament justice. what they saw, banks bailed out, and all these people making all that money including the banks that failed people don't have money and there is so much truth to that. i can't make up for what other boards did and didn't do but there's there is truth to that. there are people who destroyed their companies and brought the united states to its knees and
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virtually made $50 million. it makes me mad too. >> the old testament came up with the idea of an i-4 an eye and a tooth for tooth. the punishment should not exceed the crime so that was actually a progressive innovation at the time. [laughter] >> it i didn't think of it that way but okay. >> about four years ago the chief security officer born the major -- in new york told us there had been up to 1 million attempted intrusions, sievert intrusions in one day. how concerned are you about the cyber threats, cybercrime and cyberterrorism? >> we get hundreds of thousands a day. we have these major security centers and we work with big governments around the world to protect ourselves. a lot of what you would today call the denial of service. they are flooding the lines and it's out of iran. a lot of it is coming out of
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iran. they are flooding the line so you can't get through. they are not getting inside the computers but someplace like jpmorgan plays -- pays a tremendous amount of attention to security. we are favor of the security laws but we think it should be done in collaboration, not the laws that are set up where you shall be cybersecurity if you are not we are coming after you. we need your help. the cia, the nsa and the department of defense actually know at the border sometimes and we don't. businesses have to work together to protect the american public so we can stop cybercrime. it's going to get worse. computers in 10 years are going to be 100,000 times faster so they will be able to do calculations quicker and get through quicker and we will have to meet that in every way, shape and form. thanks i think are pretty good at this. we have been doing this a long time and our rules and
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regulations but we have to really stay in front of it. how many of you have you worried about at? don't think of cybersecurity coming over the internet. everything we do -- we know more about some of that stuff than you think the think about the person adjoins he joins the company from inside. that is where you are going to get it. >> thank you for that reassuring point. there is a young lady in the second to last row. >> the great internal fire is how you protect yourself. >> hi, danielle douglass from "the washington post." many of the rules coming out of dodd-frank have been written so i'm curious how much of an impact as the current regulatory environment having on your business? >> to separate the business, we release earnings on friday so think of prior to this quarter. small business loans up for 12 straight months, market shares
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are up for investment banking and trading has been okay. mortgage loans are up. mortgage problems are coming down so actually pretty good. if you talk about and i think you make a point, dodd-frank, 25% has been done. it's before the courts now. it's hard for me to calculate the number but i would say it will cost us overhead way over $1 billion a year. not just dodd frank, basel iii, more for brussels. a lot of these are contradictory and overlapping. all i want is we sit down and have a conversation about what do we really need for safe and sound isn't all that input is creating the necessary burden? debt burden will be hired the smaller you are in my opinion. i don't want to hurt community banks. they have a great role in life so i think we need to collaborate to get it done. it's not going to gets done properly if we fight with each other. like i said the most important,
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capital and liquidity. and there are 398 other rules. but you should know we are trying to work with everyone,, day. we have no choice. we have to accommodate and we are going to do it. we are going to do it in the spirit and the letter of the law. that is what we are going to do. regulators get very mad at me when i comment at all. we are going to comment that we will determine what we are required to me. jpmorgan will do fine no matter what. believe me, i'm not worried about jpmorgan. i am worried about the country. we should do these things right for the future of the united states of america, not for jpmorgan. >> we have time for one last one. >> let me apologize in advance for many people with their hands up. the demand exceeds the supply, a
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well-known market problem. >> mr. dimon, things. i am garrett mitchell and i write "the mitchell report." i want to ask you arguably a too big to fail question but this is not about jpmorgan chase or barclays. it's about the u.s. and china. china is on the brink of a major change in its leadership. it has written its own prescription for new economic directions which they know they have to initiate or bay to will fall off the cliff. we may or may not be looking at a major change in leadership in this country, but we are looking at the fiscal cliff and i'm wondering from your perspective as somebody who does business all around the world and despite your protestations about not really knowing much about politics, how you assess the relative chances of success for america dealing in the short
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term with its fiscal cliff and longer-term with its ability to get some semblance of pre-governance and with the chinese to be able to do the same and make the changes in their economy so that the two largest economies in the world will help things stay on line. >> china has huge problems to deal with and there are two. our democracy started with white men over certain age owning property but nine -- 90 million communist parties -- every society create some form of democracy over time and it's hard and they are worried about losing control etc. and they have to borne out their economy. think of the financial system as the spin wheel. it's not the most important thing in economy but where investors of all types, pension funds and insurance in intervals to meet through projects and
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companies and startups and r&d and they have two huge things to go through. we as the united states should help them do that. it's in our interest that they grow and they grow peacefully and they can take care of their 1.3 billion people etc.. they're going to be complaints but i defend the strategic economic dialogue. we have to do that. it's the right thing to do. america will have -- america's might in my opinion is based on three things. its economic power, which is the foundation of all other things and all jobs and all buildings and i know when i see people standing in front of the hoover dam, the government. that was actually built by bechtel who used to have spared money. the know-how came out of american business including -- who built the spaceships that landed on the moon? it was the predecessor of owing.
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those are collaborations in government business and economic, military are directly related and the united states will be the military power for a long time period or go and i think the moral power of the united states which is called freedom and democracy. and human rights and the rule of law and those things. we should not forget that. if you go to china they look at america and say how lucky we are to have those things in the businesses and why do we complain so much about our situation? they have a much tougher one but i think we should help them but make sure we are strong and we should never give up our strings which are economic, military and moral. folks, thank you very much. >> thank you. [applause] [inaudible conversations]
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>> in the councils of government we must guard against the acquisition of unwarranted influence whether sought or an sought unsought by the military industrial complex.
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>> why was that speech so important? >> a warrant against the military-industrial complex which has become a cliché now. people didn't pay much attention to the speech at the moment but they sure have since then and i expect much of his presidency making sure the military didn't get out of hand was only partially successful as he talked about the nuclear weapons buildup but he kept military spending steady. that was hard to do in the 1950's, tremendous pressure. we were creating this whole nuclear arsenal rockets and all that. really cut it in order to have the money and that was not an easy thing to do. military spending with 70% of the federal budget and today it is 25% i think. >> joint chiefs chairman general martin dempsey spoke to reporters at the national press club today about a wide range of
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topics including the defense budget, afghanistan, iraq, syria and threats to take u.s. computer networks. this is an hour. [inaudible conversations] >> good afternoon. and welcome to the national press club. my name is theresa warner and i am the 105th president of the national. we are the world's leading professional organizations for journal is committed to our profession's future through our programming and events such as these while fostering a free press worldwide. for more information about the national press club, please visit our web site at www.press.org. to donate to programs offered to the public through our national press club journalism institute, please visit press.org/institute.
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on behalf of our members worldwide, i would like to welcome our speaker and those of you attending today's event. our head table includes guess of our speaker as well as working journalist to our club members. and if you hear applause in our audience we know that members of the general public are attending so it is not necessarily evidence of my lack a lack of journalistic objectivity. i would also like to welcome our c-span and their public radio audiences. ireland since our featured on our member produced weekly podcast from the national press club available on itunes. you can also follow the action on twitter using hashtag npc lunch. after our guest speech concludes, we will have a q&a and i will ask as many questions as time permits. now it's time to introduce our head table guests and i would ask each of you here to stand up briefly as your name is announced. from your right, ben dooley,
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kyoto news service. jody beck, director, semester in washington program, scripps howard foundation. john fales, a.k.a. sergeant shaft and vice commander of the national press club american legion post number 20. lieutenant commander mike weiskopf, aid to the national -- chairman of the joint chiefs of staff. and go roosevelt, system managing editor, defense daily. colonel troy thomas, special assistant to the chairman, director of the chairman's action group. alison fitzgerald, freelance journalist and speakers committee chair and i'm going to skip our speaker for just a moment. andrea stone, senior national correspondent for "the huffington post" and speakers committee member who organized the luncheon. colonel dave lapham, special assistant for public affairs, office of the chairman.
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marilyn thompson, thomas reuters bureau chief, carlo munoz, defense and national security reporter for the hell, jan jetson, inside the army. thank you all for joining us here today. [applause] general martin dempsey is the 18th chairman of the joint chiefs of staff. he is the highest-ranking military officer in the u.s. armed forces and the principle military advisor to the president, the secretary of defense and the national security council. prior to becoming chairman he served briefly as the army's 307th chief of staff. general dempsey is a bit of an unexpected appointment. he had just been sworn in as the army chief of staff a couple of months prior but when the nomination process for another candidate stalled general dempsey was called to serve a grateful nation and he has done so with distinction.
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since taking the chairman's job a year ago, the 37 year army veteran has made headlines by dealing with the infamous curran burning pastor by calling him up and asking them to withdraw his support for the anti-muslim video that sparked protests across the middle east. he expressed disappointment over the navy s.e.a.l. who published an off direct account of the killing of osama bin laden. he said in an israeli attack on iran would clearly delayed but probably not destroy iran's nuclear program. he ps just the need to retool the military for a post-war world with a smaller pentagon budget and most recently he has spoken about the need to turn up the volume on ways to help war veterans reintegrate back into civilian world. and amid all that the general's plan was damaged by taliban militants who fired rockets at it while parked at bagram airfield in afghanistan.
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dempsey was unharmed and away from his plane at the time. general dempsey is a 1974 graduate of west point. he and his wife who were high school sweethearts have three children who have all served in the united states army and seven grandchildren. the chairman is also itself describes a notch or irish pub kind of guy who loves to sing at official functions. among his hits all available on youtube are christmas in colonie, the sesame street theme, and despite being from new jersey, new york new york. it is my pleasure to welcome general martin dempsey, the melodious chairman of the joint chiefs of staff or go up co. >> well i did hear you get a little roughed up when you come to these events. although i will say the last time i was in this room i was actually surrounded by the muppets.
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[laughter] thanks, theresa. there is a tradition in the calvary cord, i am a cavalryman by background and a calvary man at heart, that we call this for right. in the early days anew cavalry man was put on a course without a saddle, no bridle, just tea on the horse and then inexperienced calgary man would whack it on the behind and it would go speeding off across the plains hanging on for dear life. if he completed the ride he would earn his silver spurs. the proof of his worthiness to be eight cavalryman. so standing here i feel a little bit like my horse has just been slapped. so i will be looking for some spurs at the end of this engagement. before we get started i would like to recognize the passing of arthur sulzberger. as most of you know he advanced journalistic excellence notches in the near times but the entire
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profession. yours is a profession i respect just as i know you respect my profession, the profession of arms. i'm sure you would agree that our professions are both goals on trust, trust that has to be earned over time through the forging of relationships. i want to talk to a little bit about some of the relationships i've been working on. that is, i want to talk to you about the relationships i have been trying to build most prominently with partners around the world. i did just past passed past the one you market my chairmanship and so it seems to me to be a good time to take stock. over the last this year i've met with 57 of my counterparts. i've traveled to 22 foreign countries. i've placed a lot of reeves and hosted a lot of dinners. i've deliver toasts in a dozen different languages as far as i know and i have only screwed a couple of them off. why do i invest all this time in relationships especially with my foreign counterparts? simply stated we need them to
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make our strategy worked. we need relationships born of trust and underpinned by interests and common interest. we need partners who can bring to bear capability and credibility. now i know what you might be thinking. relationships are often hard, and they are. on occasion some partnerships may seem more trouble than they are worth. on the other hand when we get together in large groups, i think we risk, we take the risk of talking past the chair. reminds the one i served in operation desert storm in 1991. we know that today's young men and women wherever they are deployed, aboard ship, on the airbases in the middle of the desert, in kuwait and afghanistan, they are connected constantly with their family members. they skype in a text and a call. it wasn't like that in 1991 and impact of some of you are member in 91 when i was sitting in the desert to the south of al
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botton, we really didn't have any access to home. my wife remained in germany with the third armored division so we were exchanging letters and those letters would pass on the night. i was sent a letter and she would get it 10 days, 14 days and sometimes 30 days letter and there would be a letter coming my way and we just kept talking past each other. i'm on the letter she said to me you know, i miss you so much. it's almost like you are right here with me. [laughter] now i made the assumption because again you can't pick up the phone and say seriously lacks i made the assumption that it was just a very badly phrased sentence and i center and no back and got assurances a month later. but it does talk a little bit about the difficulty of managing relationships over long distances, at least those that if they manage to pass.
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sometimes her relationship with our partners seem a little bit like that but mostly they are worthwhile. let me give you a few examples. every chip i've taken to afghanistan i have learned more than the last time i was there. i've been there six times in the first year of my chairmanship and it's been well worth the trip. i sit down with afghan leaders and sit down with their nato command team to discuss strategy and the length -- make linkage of campaign plans. more importantly i can get a feel for how the young men and women who are out there on the leading edge feel about the mission whether they retain their confidence in our ability to achieve our objectives. i listen to their insights and i thank them for their service on the frontline. the taliban guess what we are doing. they know the bond between the afghan security forces and our forces will ultimately be what causes them to be defeated. and so they target it and i'm sure you'll be interested in
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speaking about the insider threat we face. in my most recent visit to theater i spoke with leaders at every level about the threat and they all look really, we can't let the threat discourage or dissuade us from our objectives that we must keep our eye on that threat because it's a very serious threat or go but our commitment to the relationship remains strong. isaf was built, is being built, and the ansf that we are building on 63 years of nato experience. nato has proven itself. a transcends transactional relationships. it exists on the basis of shared values. my fellow chiefs of defense that nato and i have gathered four times over the past year and i've met with many of them one-on-one. i can tell you while there are challenges, our bonds are strong as ever. i should also make mention of the fact that today in brussels the secretary of defense announced the general john allen once confirmed believe his post
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as commander of isaf and move to be the supreme commander of europe, the nato military leader and that general joe dunford who is currently the assistant commandant of the marine corps will leave his bill and move and take the commander of the isaf position. both very very talented, capable and courageous thinking officers who will put us in great shape to continue both our relationship with nato writ large and also our campaign in afghanistan. we see the kinds of relationships i'm talking about closer to home as well. this era travel to latin america and i reaffirmed our long-standing relationship with columbia. i spent a little time in the jungle and explored options for expanding our time -- our ties with brazil and i learned more about south america which are obvious i think and include porter security, maritime domain
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awareness and counternarcotics. while on the topic of latin america you should know that 17 different nations joined us for the panamax exercise this year. this exercise focuses on the safe passage to the panel can now. i mention this because on this date in history in 1913 president wilson detonated explosives at the dam boa opening the panama canal and connecting the atlantic and the pacific. it redefined geography at the time. while we have always been a power the panama canal created new opportunities. today we are still looking for new opportunities to engage in the asian-pacific and in my first year i've been to the region three times and met with 15 different leaders. back in june i took part in the shangri-la dialogue or had the opportunity to reinforce the basics of our rebalance which are more attention, more engagement and more quality.
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but the rebalance doesn't mean that we are pulling up stakes from the mideast. i am not sure we could even if we wanted to do so. i've taken five trips to the maties and held discussions with 14 leaders in the region, turkey, israel jordan and iraq. i've been to all of those countries, most of the more than once. my name is than to make sure that we are all prepared with options for the challenges ahead. both the near-term issues in iran and syria and longer-term issues resulting from the arab spring. there are some countries i have not visited yet but i plan to. china and india are high on my list and so is russia. you know i have not yet visited moscow i have had several productive meetings with my russian counterpart nikolai mccarver of in washington d.c., europe and by video teleconference several times. i could go on but as you can tell i'm working hard on my friends list. one final thought.
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during all of these travels our servicemen and women are always for most of my thoughts. they and their families have been through a lot. they are an inspiration. i saw this when i was honored to go to london to the united states delegation to the paralympics. are athletes, especially the wounded warriors, 20 of the 200 were wounded warriors, defined resilience. one of them in particular i will tell you about. the tenant read snyder lost his ear and year ago and one year after he was wounded on the battlefield he won two golds and a silver in london in the paralympics. i just saw him this past weekend at the army air force football game accompanied by his brother russell who is his care provider. there was a touching moment when neve kicked a field goal and their comeback against air force. some of you in the audience may have been on the wrong end of
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that buzz his brother said maybe just kicked a field goal and all that brad said was, nice. i just want you to know that those young men and women are out there. young men and women who one year after having their life completely altered had redefined themselves. that is what we are all about. with that i am ready for your questions and what i imagine will be the most challenging part of my national press club engagement and the opportunity to win my spurs. thank you very much. [applause] >> are we still on track for pulling our troops out of afghanistan in 2014? what additional steps are being taken to protect our troops from insider attacks? >> yeah for pulling the pulling out question implies that we know what our enduring presence will be and we are working on that right now both internally to our government but also with
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our nato allies. so we are trying to determine, based on the remix made in lisbon and then reinforced in chicago about what this long-term commitment will be and it is scoped against several missions one of which is counterterror and another of which is continuing to train and advises advise at some level. another is through naval or will -- to do their job in afghanistan. so as we determined what we will need to accomplish those missions based on the growth of the afghan security forces sometime in early 2013 we will come up with a number that will define our enduring presence and then we will take over we have which is 68,000 u.s. and 34,000 coalition partners and we will establish a kaleidoscope tickets from where we are to where we are going to be. the important point in that question is i want to reinforce their objectives remain both sound and achievable.
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as for the insider threat as i mentioned in my prepared remarks the insider threat is a very serious threat because it is clear that the taliban understands that they can separate the afghan forces from those of us who advise-and-assist them, that they will the afghan security forces a cause our will to be under pressure. by what i'm telling you from my visits over there is everyone understands it on our side site and importantly on the afghan side of to go i visited afghan corps commanders who had gone out to visit battalion level and company level organizations, taking their religious and cultural leaders with them to explain to them that the insider attacks are both a threat to us into them. as you well know they suffer as many or more actually, insider attacks than we do so where is all seas with it on both sides. is the threat but at this point
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i can report you with some confidence that it is not jeopardizing our objectives. it's just making it a little tougher and if anybody thought we could get from here to the end of 14 in a straight line, come and talk to me. >> on a scale from one to 10 how serious did you perceive the danger posed to america by the black swan cyber threats? >> the y? >> the black swan cyber threats. >> let me talk about that one in particular because there is a whole pantheon of cyber threats that we could discuss. i assume that 10 is really dead and one is not so bad? 10. i have set this since i became the chairman and have learned even more while i have been the chairman. cyberis her greatest opportunity and are greatest opportunity in making changes in our military
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capabilities. it's also our greatest vulnerability and we are working really hard. my job of course is to make sure we can protect our military networks and the cyberdomain that supports us. that it's been my focus in the first year as well as trying to contribute to a broader dialogue about critical infrastructure and other threats to the nation and we need to keep after that until we do the best we can to protect ourselves. >> to what extent do you think that the recently released capstone concept for joint operations, joint force of 2020 will affect what each service is now doing and is does it change what they were doing under previous c. c. j. o.? c.c. jl. >> i hope it changes a little bit. one of the things that i have tried to tap in is that we are a
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burning organization. what have we learned over the last 10 years? what capabilities did not exist 10 years ago and certainly didn't exist as exists today and i will name three. one is isr, intelligence surveillance recognizance. some of you know the element most visible in that regard are unmanned aerial platforms. there is aerostat balloons flying all over afghanistan and there are all kinds of intelligence surveillance and reconnaissance sensors out there now that are informing us about the battlefield in ways that were really unimaginable about 10 years ago so that is one. the second is the way that special operating forces have grown both in size and capability so in 2001, 33,000 across the services and by 2017,
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70,000 across the services but it's not just about the quality. quantity. is about the quality so they change in the special operating services and the third is cyber. if you would have tried to gauge me and a conversation about cyberin 2001 we would have -- first of all not though if you are my age but it would have been hard to have that conversation because there were probably a handful of people who were out there exploring the potential of cyberso -- but now it is really grating. as we look at the new ccjl what i'm trying to do is guide the force in its development toward 2020. what i've realized is 80% of joint force 2020 exist today. it does, it exists because existing organizational design, leader development paradigms are in place and programs of record and the acquisition are humming along or not humming along but the point is 80% of the joint
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force we will have in 2020 exist right now where you can see it coming. it's that 20% that i'm trying to negotiate with the services and find ways to integrate these existing and emerging capabilities to make us a better force as we also learned to live in a different fiscal environment. >> the capstone concept/the world is trending towards greater stability geddes is the world is potentially more dangerous than ever. how will this stability overcome the threat? >> well, you know when people ask me about afghanistan, the first thing i normally tell them is possible it's possible for violence and progress to coexist in places like afghanistan. i would say the same thing about the paradox of stability and threat. they coexist, so i have talked about a secure -- which is
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violence is at an evolutionary low and it is except the capabilities to impart violence are in the hands of the people that heretofore were not a bad access to it so you have the paradox feeling as though -- this is kind of the tom friedman and the world is flat and connected and therefore is less likely to inflate each other. maybe but there's also the other school of thought that says it's in the unconnected parts of our globe where of violence will be both more prevalent but also more violent because the instruments for violence are more available now than they have ever been. i won't speak about it because it would take too long but go back and look at what 10 let terrorist terroristic in mumbai in 2008. the havoc they wreaked over it period of time in a major city, and it's an eye-opener and how they did it and how they leverage commercial off-the-shelf technology. >> with the largest
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discretionary -- d.o.t. is target for budget cuts. sequestration looks likely since we are seeing little action from congress. of problems is that going to present for supporting soldiers, sailors and air personnel? ..
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>> the challenge he described in regards to sequestration is it takes away to describe the budget as he or she, at some point, would like to apply it, and it has a mechanism in place that fundamentally causes it to be reduced by 10% across-the-board. that makes it almost impossible to keep the force and balance. that is the issue of sequestration. >> what was the department of defense's role in foreign policy? >> again? >> role in foreign policy. >> well, this is -- i'm sure that the question is in response to the conversation we sometimes have about the militarization. is the department to comment across the world, and is the department of defense -- i'm
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sure there are places in parts of the world where that is true. because of the way we are organize. we have four functionalist and geographic commands from a we are prominent and we have great access because we build relationships. but i will say that as i travel, the partnership internal towards the government, ambassadors, combatant commanders, those who are part of the defense cooperation agencies, is actually quite remarkable. i think that the notion that the military is too prominent and foreign affairs right now is probably mostly focused on the mideast. the rest of the world, i think, it is a pretty careful been pretty thoughtful balance. what i worry about the little bit is, again, back to this sizing of the defense department.
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there will be some relationship issues that have to change as we pull our way wings and a into bed and face these budget challenges. i also worry about the fact that we are so well partner. i tell people that i was probably a kernel before i met anybody in the department of state. you know, so i was a 42-year-old guy in uniform before i met my first diplomat. i would venture to say today, because of the shared experiences in iran and afghanistan, there is not a capital that hasn't closely partnered with all the other agencies of government or nongovernment organizations. as iraq and afghanistan wayne, maintaining that relationship will be a challenge. but we have to do it. >> does the harsh rhetoric of a political campaign for the relationship, or do your counterparts around the world
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understand it is often just talk? >> what harsh rhetoric? [laughter] >> you know, let me use this kind of an approach. you know, there have been some things that about me and israel, for example. in every case when that occurs from i will pick up the phone and call my israeli counterpart. and we discuss to ensure that he knows that i'm not going to communicate with them to the media. i will communicate what i want to say to him person-to-person. so there is a recognition, i think, on both sides of the ocean, with all of our partners that political campaigns often create conditions where things are said that we just need to be
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patiently. we support and we promote democracy around the world. with that comes some pretty zesty moments of discourse and debate and freedom of the press and freedom of speech. and we embrace it. but the important thing is if we ever have a question, that we have that relationship. that is what i have talked about is one of the principal focus is in the air. i can pick up the phone and call him or he can call me and say what are you talking about? we can both do not. >> what is your take on the perceived suppression of military voting initiatives? there seems to be so many obstacles in accommodating the military bill. >> would've been to the
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constitution calls for is freedom of press. among our freedoms in this great country is the freedom to vote. and i incur every chance i get either in writing or just did a public service announcement yesterday for internal consumption. encouraging our young men and women in uniform but nobody out and that nobody has had -- nobody has earned it like those who have put themselves in harms way. [applause] as you know, the act required us to establish certain procedures to make sure that our service men and women have the opportunity to vote. i have been in support of the department of defense's efforts to make sure that we live up to that. if there are obstacles, i think him, as you describe them, it is mostly that not every state has a different system, but there's enough differences out there
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that sometimes it is hard to navigate. that is why it is true that we are committed. in fact, more than that. >> how can you prevent attacks on local troops in afghanistan if the goal is to train them? >> first of all, i will say that we can't prevent it. this is an enemy factor, infiltration, radicalization, influence, this is a society that has suffered under conflict for 30 plus years were young man have often settle their grievances as opposed to conversation. so i can't say for that. we have to be honest about that. what we can do is be honest i
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continue to motivate them. we call it vetting. that's how they got into the service. while they are in the service, how we partner with them to establish that level of trust. by the way, i think it is important to note, that the australians came to the same conclusion. one of the ways you can penetrate the risk is like becoming closer to them and not walking away from them. this is just a fact. i have done is in a rack. you cannot commute to work to train and advise and be there for three or four hours while things are going on. you just have to be part of their lives. it does put you at greater risk initially, but it actually lowers as it builds. as the relationship builds.
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we have counterintelligence resources, we have incredible intelligence apparatus in this country we are reaching out to their leaders and encouraging them to be as concerned as we are. and it is a very comprehensive issue. but we cannot prevent, we can lower the risk, dramatically lower the numbers, but we cannot prevent it. >> in light of the differences between the u.s. on one side and russia and china on the other, what is the most complex issue? >> i think that syria is the most complex issue. syria is the most complex of all. because it is in many ways, it
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is the crucible for all of the other factors and influences related to the arab spring, conflict among different ethnic sectors, knee-jerk our interventions, nonstate actors and, you know, honestly, there is a catalog that we could share on syria in particular. as you said, there are major powers with interest in their own concerns about the outcome. what is on the other side. what is dominating this. i can tell you that what we are doing, we continue to plan for a number of contingencies. we are prepared to provide options if those options are required, and that is not just options internal to the united states. as you know, syria is bordered
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on the north by turkey, a very important nato partner, and we are working with nato as well to understand and to try to clarify and to try to collaborate. at this point, the military is not a predominant instrument and not. >> can you provide details on new measure options and what is being discussed at the nato summit in brussels this week? >> well, i have cataloged the multiple issues of insider attacks. i will tell you that john allen is in brussels right now.
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and it is a very important part of this conversation, on this issue and they have been victimized by many of the challenges that we have. so to have the afghans themselves. i can't say much more by way of emphasis than to say that among the 28 ministers of nato, this is correct. >> during an interview on charlie rose last week, mr. pavlov stated that in arab spring may be followed by a nuclear winter. how can we avoid escalation of the world's hotspot, be it syria or iran or the south china sea? >> with their help, hopefully. i hope that wasn't his intent to challenge us. because this is something we have to work together on across the region.
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it is the proliferation of nuclear technology it should have us all concerned in particular about iran, and also they have demonstrated both the intent and the will to proliferate technology, in particular, some parts of the world that we would not want to proliferate. we are collaborating mightily with northern distribution of works out of afghanistan. we are working with border security, counterterrorism, there are more places that we are working on and working with our partners than not. it is, as the secretary said, it is an issue that could proliferate, in particular, that
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if iran achieves nuclear weapons status. >> why was there no security for our diplomats in libya? >> first of all, i would not agree that there was no security for diplomats in libya, but more importantly, as you know, there is a commission that has been formed with my predecessor, mike mullen, to take a look at not only the event itself, but what led up to it. and i have great confidence for that question to be answered. >> going forward come howled and maybe he changed? do we still need a leading carriers and what would you replace them with. >> you know, i did get a navy cupcake. i'm not sure if that was intentional or happenstance. [laughter] >> you know, in the defense strategy that we have revised, both because we wanted to and again, we have to learn that we
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are not looking at every opportunity to change and embrace it. we are missing what is a very dynamic future. look at that strategy for two reasons. the first is the fact that it was time to look at her strategy, and second was the budget control act strategy that is not sensitive to resource is nothing more than rhetoric. there is always this balance between the ends, the waves, and the means. we have to take a look at the ends of the ways. and that strategy, we have articulated that it is in our long-term interest to begin to rebalance ourselves to the specific. the issue is how do you rebalance the intellectual capital, if nothing else. and how do you rebalance your
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intellectual bandwidth? we have been doing that. as you do that, you know, the pacific is in maritime -- largely we in maritime domain. and you have to go a long way before you find anything with dirt on it. so what has happened is that we begin to look at the navy and capability. they have done a remarkable job. i will tell you, they have done a remarkable job of allowing us to meet our needs as adults. right now, we need to carriers and we have them there. we have other carriers and we are also announcing that as well. we have to do that with the industrial base and so you have
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to meet the maintenance of it. at this point in time, i believe that we got what we need. based on the navy's good works, we are meeting the needs for carrier presence around the world. i am sure that they will have some thoughts about that to share. i think we have the carrier sized correctly, the carrier fleet, and we will continue to take a look at it as her strategy evolves. but for now, i think that we have created a good thing. >> what is the change in nature of land warfare? >> this one i can actually
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answer. >> well, for one thing, i am not in the camp that says [inaudible] the idea that we don't need land forces is not a good idea. as the chairman of the joint force, i really do believe that we are far better when we see each other as the sum of our parts are not and not as individual services. that being said, i really like having four different services around a table. because that diversity of thinking generally pulls us in the direction that creates better options for the nation. so there is a significant
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change. actually, having said that we have to be cautious about sizing the land component, the nature of land conflict is changing. thinking about the big organizations first. 15,000 increments. and then we set ourselves, if we need something less than not, we will disaggregated. we will find a way to decentralize it. we are going to build it the big organization in mind.
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that is when you take us in a different direction, i think. i would suggest that it's not from the top down, but rather from the bottom up. >> what is the next step to reducing suicide among active-duty service members? >> you know, there is something sequential here, and it's not, this is really another one that, you know, we really need to continue to learn about. learn about what is happening. suicide is a national problem. it also happens to be a dyer an important and serious military problem. something out there is changing in the resilience of young men and women today, and so one of
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the things we are looking at is what we have to do is re-recruit these young men and women off the streets of america. how do we build resilience into the force from birth and how do you sustain it to a career where there are pressures and a deployment in combat, or whether it is my thoughts are financial challenges, it is really an issue of building resilience over time. secondly, you know, there is a correlation. there is a medical component of that, i think, that we have to address. the trust of the force is really what i think ultimately provides us the best chance to get a grip on us. here is what i mean by that. but if i show up and i can't do enough push-ups to pass the test, you know that some
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surgeons is going to say, khmer, i wanted to partner with her. she maxes protest every time she takes it. and so for the next three months, you're going to be doing physical training with her. by the end of that time come your way past the test. there is really nothing like that or states of depression. that is what we have to figure out, is how do you get the entire force, not just leaders, the leaders, the leaders understand that, but that's not true -- the leaders understand the significance of it. i'm not sure that we really understand the depth and breadth of the issue. but the leaders get it, we have to drive it to its best level. it's not preventable, back to the same route we try to do as much as we can we can't stop suicide, but we try and do as much as we can only have two data. >> the military, particularly the army, used to be a place where people who had some trouble in their lives could
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enlist and go upgrade wasn't the army's mission, but it serves a purpose for quite a few people. is that era over? who does the army and other services want to must now? >> we get in plenty of trouble, have you been reading the news? [laughter] that is a fair question. it is probably related to the reality. their only woman for that can get into the military these days. it is either because of physical or help or education or, you know, moral issues in their youth and youtube and facebook, you know, they are going to be a problem for us in the future. so what i am suggesting is that we are getting a very high quality young man or woman. and i don't think that anyone here would want to change that. that being said, there is still the opportunity, once you meet
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those minimum standards, to do the kind of growing the described, but i think if you want an all volunteer professional force, that those standards have to be the same. if the nation decided at some point that we should reconsider an army, then it becomes a different issue. but for now, what i am very content that we are getting that part of america's society, that you the american taxpayer would want us to have. he met do you support a draft? >> you know, do i support a draft? i think there is universal service, there is elected service, and then there is the other service. if i thought that we could adopt a universal service, i would sign up for an effective. selective service doesn't become something that generally produces either result that you want because it becomes so restrictive. the issue of being restricted in
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that there are plenty of people who opt out. those who opt out, generally speaking, causing part of the society to bear a disproportionate share of the responsibility. i should mention, by the way, the force is really representative of america. you know, there is some mythology that it is not. but it is. i am pretty confident in my data. in the army, i'm very confident in the data. and that is that we get a good, not perfect, but a very, very good representation of america. and you want the military to represent the society. i am not sure -- like i said, i would have to see the mechanism before i agreed to the path. because of the mechanism that will make all the difference. >> the economy plays a significant role in recruitment
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and retention. will the economy coupled with costs change military retirement pay and health care have a negative impact on retaining a professional all volunteer force >> i don't know. as i travel around and visit with young soldiers, and i also visited postcards from time to time, and i asked him why did you come here come the answers are very varied. some of them are coming because they want to defend their nation and they know the nation is in a more spirited and some come in for economic reasons. but i will tell you that it doesn't matter why they come in. because once you get them and you build into them the sense of purpose and sense of belonging, another attribute, by the way, that tends to be missing an american youth as they try tried to figure out who and what they are. by the way, i'm not trying to recruit you, but i will tell you that i'm happy to have your kids
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[laughter] one of the things that we do for the young men and women who agree to be part of the profession as we give them a sense of purpose. we give them a sense of belonging. we give them the sense of team and the opportunity to grow and develop. i think as long as that is the case, there will always be enough young men and women who choose to serve. >> to the armed services have a role in helping service members translate the skills to the civilian market so they can get jobs? >> absolutely. one of the things that we are working hard on is the issue of transition. so i'll i will use my own career as an example. when i commanded the lieutenant colonel and did so in the '90s -- the early and late '90s -- we realized that we needed, as we started to downsize -- we went from 781,000 in 1991 to 444,000 by about the middle of the decade. as we did, we realize that we
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really have not prepared, mostly young men in those days -- but that young men and women. we have not really heard them for that transition. and so we developed transition programs. the transition programs were implemented. the last six weeks you are in the army, navy, or marines -- marching over to the learning center, filling out all the useful forms, build your résume is often a computer. have a nice day. if you do want to migrate or translate your skill set, you can't wait until the last six weeks to figure that out. so what we are doing now is starting to transition when you enter the service. we are very closely partnering with the department of veterans affairs and rich secretary panetta, getting ready for the
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meetings, naturally. but the issue is that we are seeing transition as a career long activity. what that illuminates is that you can credentialed people. you can get a welding certificate that is portable across the united states if you are a welder. truck drivers, electricians, communications resource. the tougher ones are tankers and infantrymen. we are working with them to transition over time. and not just at the end of their career. >> today we have a veteran that attended georgetown and the university of oxford. costs for oxford or one 10th of georgetown. would you ask american private universities to provide best affordable education in comparison to overseas education >> well, first of all, you have to be a pretty smart son of of it, don't you?
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[laughter] [laughter] i think the educational benefits that have come online, well, there is a five minute warning. i didn't notice that. the educational benefits are very important. the new g.i. bill, it does provide a great educational safety net. as many of you know, it allows you to pass it to your spouse or over to your children if you don't have the need to use it yourself. i am not sure that we can do much better than that. i will tell you that i am always engaging with business and industry and academia to find ways to help veterans. it's not so much with the cost, it's generally manageable, but about the job outlook.
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on the other hand, trying to help them. i'm not sure that i would go down to try to help them lower the cost of georgetown. there is a whole bunch of people in georgetown. why don't you ask them? >> how can we as taxpayers and voters facilitate your work and make military life easier? >> well, that's the first softball of the day, thanks for that one. i don't know if i wanted to be easier, to tell you the truth. there is a certain satisfaction were serving in the profession that is uncommon.
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that allows you to recognize that your contribution is made and that you kind of set aside some of your personal goals. not all of them, i am all for ambition, but when you're part of a team, sometimes your own personal ambitions have to be set aside. so i don't know if i want to make it easier, certainly not while you're serving. let me get out as a veteran. i actually think that there is -- there is this emerging image of the veteran of this campaign is somehow being a victim. and frankly, i just don't see it. now, there are people that need help. there is ptsd, traumatic brain injury and i got it. we need to help that. but believe it or not, the vast majority, of course, the vast majority is stronger for the experience and they make great employees and students. they are disciplined, they are
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courageous, to have a sense of belonging, they have a sense of purpose. it is actually trying to reconnect them to society that is the hardest thing. but they are very valuable to the nation. and that is the image, not the serviceman or woman, but we need to identify them and help them. the majority, of course, something is something that the nation should be very proud of. [applause] >> we are almost out of time. but before asking the last question, let me remind you of our upcoming luncheon speakers. we will have a guest from penn state university and one from the band the who. finally, i would like to present
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you with this national press club coffee mug. >> thank you. >> the last question, i have had many requests you would reprise one of your irish or one of your sesame street scenes. >> okay, here we go. >> when irish eyes are smiling ♪ it is like a morning spring ♪ and the irish laughter come you can hear the heart thing. ♪ and when irish eyes are smiling tomoko it will still your heart away to tomoko. ♪
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♪ ♪ [applause] >> i would like to thank everyone for organizing today's event. [cheers] [applause] [inaudible conversations] >> the device presidential debate tomorrow night live on c-span, c-span radio, and online at c-span.org. watch and engage on c-span2. on c-span2 tonight, the debate in iowa's third congressional district followed by the defeat between the governors of montana. and later, we talk with david corn about the secret video of mitt romney on tomorrow morning's "washington journal",
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professor julian selzer talks about the impacts of vice presidential debates in past elections. and executive director of the democratic national campaign committee, guy harrison and >> with what he did on the campaign trail, nothing except her borrow and spend. as a result, not fixing it, our credit rating was downgraded for the first time in our history. we laid out a 4 trillion-dollar debt reduction plan. we already passed a trillion of it. ladies and gentlemen, these guys
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don't like anything. they don't only like our plan, but what is your plan? umax thursday, congressman paul ryan and vice president joe biden will face off in their only debate. abc news martha radek will moderate and you can watch and and engage with c-span or lack of a preview at 7:00 p.m. eastern, followed by two waste watch the debate at 9:00 p.m. both candidates on screen the entire debate. on c-span2, the multi-version camera debate. live coverage will be on c-span, c-span radio, and online at c-span.org. >> this government, as promised, has maintained the closest surveillance of the soviet military buildup on the island of cuba. within the past week, unmistakable evidence has established the fact that a series of offensives missile
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sites is now on that in prison island. the purpose of these bases can be none other than to provide a nuclear strike capability against the western hemisphere. do you deny that they have placed an will be placing intermediate missile sites in cuba? yes or no? don't wait for the translation. yes or no? >> in 1962, live from the jfk presidential library and museum. stories, film makers, and journalists, on the 50th anniversary of the cuban missile crisis or 12:30 p.m. eastern on american history tv.
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>> candidates are dissipated were the u.s. house race for the i with her district is hosted by kcci-tv modmac good evening, everyone, we welcome you to this debate here for the third district in iowa. i am kevin cooney and i am joined by katie obradovich. we are going to question the candidates. republican tom latham and republican winner boswell. kcc i am the register article users can find it tomorrow on cbs.com. >> a brief explanation of the procedures that were going to follow tonight. it will be fairly informal, but we do have a few rules to keep on track. the candidate each has one minute to open things up in 45 seconds for the closing statements. kevin and i will ask questions
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and we've also read questions from readers and viewers. and their on no time limits on the rebuttals. but we will encourage results to be safe and on point. modmac just a few moments ago, a coin flip was one by leonard boswell. congressman tom leighton will begin opening statements. >> thank you very much for the chance to here tonight. and for hosting this debate. i'm a small businessperson and a farmer, that is what my life experiences. if they had more opportunities
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than what their parents and grandparents had, everybody tonight, if we stay on the track that we are on, are we going to leave those children with more opportunities in the future. and i think that that really is the question today. the way that we are going to solve this problem is to finally pull together to work together and listen to each other and have real solutions. latham: we have a very challenging time, as you all well know, we have to come together. we are going after this, but we are trying to get people together and see if we can work things out. i think that we can do that.
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i'm in the middle, and that's where we have to be if we want to get things done. we can do this. we can. i look forward to this discussion tonight, and we look forward to continuing to serve you in the third district of iowa, thank you very much. >> moderator: the first question? >> moderator: a majority of ire of voters think that the country is on the wrong track. approval of congress naturally is averaging about 14%, which is a very generous number at this point. why do you think that that is? what do you need to change if you are reelected to make sure that you are not part of the problem? latham: i have worked very hard congress work across party lines. i think the reason why is all
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you are having out of washington is a bunch of partisan bickering. no one seems to be listening to each other or working towards the kind of solutions to the huge problems that we have today. now, i am known in washington and certainly, with your newspaper to be named the most effective member of the delegation. in washington, of the house delegation. the reason for that is because i do work across party lines. housing and urban development where we have to work together. my ranking member brags about the fact that he is a very liberal member for massachusetts, but we work together all through the process this year. three days of debating amendments on the floor of the house. we also have the largest percentage reduction in spending. so we can do it. if the people will listen.
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>> moderator: i think that any member of congress i would ask would say that they are working across the country being bipartisan. is there anything that you could do differently that would help congress work more effectively? latham: i would tell my colleagues, number one, but the problems are too big. they are too big for one party to solve today. that we have to sit down. hopefully, after this election is over, people will actually want to accomplish something to get our work done to actually do something for the american people, to get rid of this partisanship. >> moderator: congressman boswell, do you think that people want to get things done more it in the next term up until they have now? why do you think that congress is seen as being so ineffective by voters nationally and in iowa? boswell: you know, i think that we must get things done and i
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think we have to come to cooperation in the middle, and that is what i have tried to do in my entire time serving. we have to come together. we cannot be talking and try to keep just talking. i think we have had maybe 30 votes on affordable health care, just like we want to hear it over and over. knowing that wasn't going anywhere. no willingness to compromise in the senate, accusations won't do anything. but we need something that we can work with and something to come to the middle order. we must do that. like i said earlier, we have to be with us. we must be with us. it's a mess of a is tom, you know, we need to evoke change. we have to do these things for the future of the country.
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it is a privilege for all of us in this country to serve. >> moderator: congressman boswell, what is the most important thing that congress can give that would stimulate job growth? boswell: is very important to iowa, the farm bill, and all of the producing states across the country. we have to have a farm bill. there has been political questions. let's have a discussion on the floor about it. let's see what the amendment is going to be. let's get it done. >> moderator: congressman
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latham, what do you think is the most important thing to stimulate job growth? latham: i have done everything i can to bring the farm bill to the floor. i totally disagree with the leadership. but when you look, kevin, when you look at jobs -- getting this economy going, and the cycle round and listen to constituents, small-business people, large business people, it doesn't matter. the very uncertainty that is in the marketplace today, what is going to happen next your taxes, the enormous regulatory burden is coming out of washington, people don't know how much it is going to cost to have that new employee that they might hire with the health care bill or epa regulations. all of those things that are very uncertain in the marketplace. there is a survey that came out and said that 67% of small businesses today are not hiring because they don't know what to expect next year. and that is why we have to have
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help with the taxes and certainty as far as the regulatory burden is going to be. then we can unleash this economy and we cannot people have the confidence to higher and to grow grow their business and to invest in it. that really is the biggest issue today for small-business people, certainly, and really all businesses. >> moderator: i'm going to stop you there, congressman. i'm going to ask you, what is the worst thing that congress can do right now as we start to drive economic growth. latham: increase taxes or, really believe, that the regulatory burden that people have today in small business, they are fearful of trying to comply with all of these new regulations. and what it is going to cost them is probably the number one issue before them today. >> moderator: okay. congressman boswell, go ahead and respond. if you answer the question what
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is the worst thing the federal government can do? boswell: tom talks about the uncertainty. but we need to take care of the things that create the uncertainty. this is not what we need to do. we need to stop talking about those things and we need to get something done. yes, i think that whether or not you support the bush tax breaks and, you know, if you do not -- because it seems to me like we have been involved in this long, long war going on. and i can't imagine what the soldiers feel it. i know what i feel like coming back from vietnam. and now you have to pay for. that might not be a very good thing. >> moderator: how he responded that? latham: not at all, and house of representatives, we have passed the current tax laws, and i
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think it is interesting that horseman also says that he proposes that we vote for a budget. the taxes, obviously, we need to extend us. you know, we have this rescinding of spending and we have passed a reconciliation to take care.. which is a $1.2 trillion cup with an ax rather than to go through and carve all of our savings. it will be an extremely busy lame-duck session after the battle. >> moderator: have you voted for the tax cuts? boswell: that is correct. the working men and women out there in america depend on being
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able to make their requirements, their debts of their payments and everything else. to put more pressure on them could be a very bad thing. so i don't think that the wealthy need it, but the working class men and women did need it. and so that was the reason that i do that, they needed it. those working americans need that assistance at this time. >> moderator: gentlemen, let me kind of expand things. i would like to know how far your opinion -- how far the government should go and comes to taking measures to stimulate the economy. perhaps, more specifically, is there another stimulus out there? another stimulus that he might accrue in the infrastructure in the individual industry and such. our tax incentives, light stimuli come to business or individuals, let me begin with congressman latham.
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latham: i would never support another 831 billion-dollar amulets package that was a failure. were the basis was that unemployment would never get to 8%. it was 43 months of over 8% unemployment afterwards. the money was not focused towards job creation. it was basically intergovernmental transfers. it didn't put enough money into what we should have invested, and that is infrastructure. things like that. only 3.6% of apple stimulus bill that actually went to roads and bridges. but again, kevin, what we really need, and we talked to small-business people out there, they are uncertain about their taxes next year. they don't know what the marginal taxes are going to be the capital gains tax rates are going to be, the dividends, what the death tax is going to be, after the first of the year.
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what the alternative minimum tax will be. how can you invest in an economy within those uncertain times? >> moderator: would you support a certain stimulus that was similar if there was more infrastructure, like building more roads and bridges, say 42,000 miles of interstate roads back like we did in the 1950s? latham: those are jobs that will be shipped off to china. those are jobs are here. that would be very important. now, as chairman of the transportation and housing and urban development subcommittee, i deal with that all the time. we would like to see that much greater investment. the revenues are only $27 billion, and that is the problem today. we have to find a revenue source in the infrastructure.
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>> moderator: i want to give you time to talk about this same issue, congressman boswell. boswell: yes, absolutely. we have to do it. and i didn't hear you talk about the shortage, but i did hear you talk about the revenue to increase that. but we don't want to have a situation that they had in minnesota a couple of years ago. that is a very good thing that we certainly have to do. the stimulus, when you think about the great recession that we got into, many have already said they made use of conventions, but the president had to take on things like this president has had to take on. you know, when you think about teachers, and the teacher with education, law enforcement, safety on the streets, we think about firefighters, things that
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we have had to do, but where would we be? what would've happened if we could get the good things going again. >> moderator: you mention the mentioned to roads and bridges, but what would you favor and how would you pay for a? boswell: let's raise the death tax. that is not new information for you that it would raise inflation, but we talked about that in the transportation committee sometime ago. the deal was made and we went and talked to president bush at the time and he said no, and it was vetoed. it didn't happen. and we fall behind. we have to do it. if we don't, we will not be competitive. >> moderator: congressman boswell, i believe that you support the tax on those $250,000 a year and above, is
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that correct? boswell: that is correct. >> moderator: are you worried about will slow the economy and hurt job creation? boswell: a lot of people say that, but when you look at the trickle down, doubtless to store the success when you think about the years that we talk about that. but if you go out there and you do things -- we are second only to hartford as the insurance center. you think about the working men and women and the people in the factories. it is just true. all of these buildings that we have downtown, people that show up to work, and they are the ones that get the opportunity and they will go out and buy appliances and they will have to have a fair shake. therefore, we don't want to put them in a more difficult situation.
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we can't keep doing that. >> moderator: mr. latham, what evidence is there that raising taxes on the top tier would actually decrease job creation? latham: i think that's a great question. and the national federation of independent business study, you have to remember that most of these people are high earners are small-business people. they will get to hit with a tax increase. whether as some of us, the study done by ernst & young, said that it would cost about 710,000 jobs in the united states, if, in fact, those taxes were to go up. now, i agree with president obama two years ago, when he said that when you are in difficult economic times, it is the worst time to raise taxes on anyone. especially the people you are expecting to hire to be job creators. these are people who are earning
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money. these are people who are investing. you know, talk about taxing the rich. warren buffett, and those kind of folks, those folks will be tested it because these are taxes on earned income, not passive income. >> moderator: are there any taxes they would consider increasing? congressman boswell just mentioned attacks on infrastructure. latham: in the middle of a very difficult time when people are struggling to find jobs, when people and small businesses are having real difficulty trying to create jobs and invest in this economy, i think it's a very wrong time to raise taxes on anyone at this point. >> moderator: what do you say, congressman boswell? boswell: i am told that you have come and and i didn't expect you to give a different answer than
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what you did. latham: boswell just said that he wanted to raise taxes on small businesses and burners out there. boswell: i meant the wealthy. latham: but it doesn't affect them. >> moderator: 250,000 of earned income. latham: there is a difference between the warren buffett's and people who are out there working. you know, and that is a real difference. if you don't understand, i am a small business person. i came out of that background. you can have a good year and then have two or three bad years and you would get hammered in that one good year, and he would not recover. people think that small-business people just take that money and go to hawaii or something. they we've been in the business. they invest it, that hire more people. that is how you create jobs. boswell: i'm glad to hear you
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say that. >> moderator: if i could ask a follow-up with congressman latham, this is the worst time to raise taxes, so what would be a good time to do that? employment, if it was back down to 3.5%, would you consider increasing taxes on those making $250,000 or more? latham: that's an excellent question. what we will do and what we need to do is extend the current tax for one year, to give us an opportunity for overall tax reform. what we are talking about their is to lower rates on everyone. and have maybe 25%, a 10% rate. you also start off with a clean sheet of paper. as far as the loopholes that are in the tax bill. ..
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>> should health care reform as we have now remain the same? >> it seems it is actually working and people across i would talk to me about it. or the parts of it that are very important to it. they did not kick the can down the road. so much is paid by everybody through the emergency room
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so let's include more people. the pre-existing condition who wants to go back to that? there should be some changes. the hospital situation, i wealth where the rubber meets the road will get the back. but they are giving better care. the fact they are creating jobs. >> changes? boswell: that will happen as we come to that point* but we're still in the infant change you cannot have a cap the policy because you have gotten sick common in the hospital, cannot have children on until they are 26.
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there are things that are working with the feedback and. >> just to make sure but it sounds like you did not want to change anything? teeighteen i am willing to listen to the feedback and tweak. i can compromise but overall it is a good thing. >> will direct the same question to congress manley them. what do like or change your one to get rid of? latham: winnow controversial. that is a access for pre-existing conditions. taking off the cap for the catastrophic losses keeping the young people on the insurance policy of the 12. those would be included with any reform. we need to replace the current health care bill. it will not work. $716 billion coming out of
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medicare that people have paid into boswell: that is not true. >> moderator: hold your fire. >> 715 -- 716 billion. the medicare trustees just came out with a report that said 16% of the hospital's would no longer take medicare patients be coz of the draconian cuts to the hospitals and nursing homes and home health care providers the physical therapist and the doctors. it will not work boswell: have them -- have any of them done it? latham: at this point* but
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the medicare trustees are saying. the people who run medicare. >> moderator: i will ask a question about medicare boswell: congressman latham voted twice on the right and budget. >> moderator: listen to my question first attacking medicare is in your ads between mr. romney and president obama and the fact checkers are having eighth field day. i'd like to sort out the facts. we heard from congressman latham about the affordable care act was savings and cuts to providers. why is that a good idea? boswell: it is to give us time to work on it.
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nobody is denied medicare. when they started them up they were making big profits. we did that with the affordable care act. it extended the life tenure is. if you turnover, 2016 it is gone. we're back to the 40 million was no insurance insurance, pre-existing coverage come a children not covered and nobody wants to go back. that is what 1/2 been if you want to turn over. and we have the bill. it is out there almost two years nicaea -- i do not see the single co-sponsor. how sincere are you? latham: there are many bills
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out there boswell: yours has been out there in committee with no co-sponsors. it seems there is a weakness of what you be the fed latham: not at all. latham: do you have the bill congressman boswell? boswell: in the affordable care act. does need some tweeting but the affordable care act is working with i will help them mercy. >> moderator: i want to redirect this but you voted twice for the paul ryan budget that includes a plan for medicare. that is being criticized
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from democrats as the beginning of the end. why are they wrong about that? latham: that was the fact checker political ally of the year last year. we save medicare for the future. the cannot take $716 billion and then spend it to save it. when it will do is keep the money in medicare so so the doctors and the affordable care act that congressman boswell brags about. the end of the year they will have 27 percent cut to reimbursement. doctors will not take medicare patients. the affordable care act did
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nothing for doctors. we need a system to preserve medicare for the long-term boswell: it will preserve it and take the waste out of it. it is a good thing. it has happened. but the ryan budget does the same thing to move us to a voucher system. >> [inaudible] teeeighteen day think we could go out there? it will increase by 6400. we can do better than that to. >> it is interesting. congressman boswell voted for vouchers in 2003.
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the house passed a version of the prescription drug plan. that had the same premium support that he now claims is vouchers. it went to the senate it was taken out to then he voted against it. it was good enough to change his vote boswell: are you talking about the pharmaceuticals and the doughnut hole in? i did not vote for that to when the leaders came to the floor and a twisted arms latham: you voted for the house version. >> moderator: we will agree to disagree. our debate continues.
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we will take a short break. welcome back their race that roll-call moved into the tossup category leading to the republican side with that designation came more television ads it. >> moderator: we will replay adds come from the candidate's own campaigns. we will talk about them bofors paid for by the congressman latham campaign latham: i am tom leed am i approved the message. >> thousands of lost jobs. as i once quibbles and struggle to get ahead congressman boswell reported his government staff of happen million dollars of bonuses as big as $14,000
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paid by i would taxpayers. iowans struggle file congressman boswell spent money on bonuses the washington way. >> moderator: tell us about this latham: congressman boswell has given his staff since 2008 when people were struggling for jobs, losing homes congressman boswell found inappropriate to spend $500,000 to give his staff bonuses. that is washington thinking to think maybe nobody will notice. people are hurting trying to work very hard to say their job and we give these tax payer bonuses is totally inappropriate. boswell: how disingenuous when you have done that. we have the small staff.
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they worked very hard. we appreciate them. we have 34,000 people we have to serve now. but we look did up. my office has given back more than what his has brought on average he pays $6,000 per year more. how can you be serious when you pay more, and turn back less. latham: the fact of the matter is over the last 16 years he has paid his staff 1.5 million dollars more than my staff. the "des moines register", excuse me, part of the problem in washington
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is people don't listen in. this is the washington think right here. you can talk over somebody. you don't have to listen. my way or the highway. that is what happened with nancy pelosi leonard boswell weren't charge of the house. the cap-and-trade bill, stimulus, health care bill, brought to the floor in the middle of the night with no amendments or no opportunity for debate to jam it through. >> moderator: congressmen have you paid $500,000 depending on which advertisement? one is from the national republican committee and one is from congressman latham. boswell: i have given bonuses as incentive for
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what they have done. tom has done thousands himself. would get the overall picture on average he pays 6,000 more per year. it is disingenuous. >> moderator: let's move to another commercial and have closing statements. let's listen to congressman boswell. >> i am letter bozell i approve the message. the tom laid them an maybank deal continues. first getting 2.4 billion dollars from the bailout. now six directors became to congress but now but latham family bank still has not paid off its debt to the taxpayer. nice. tom latham gets rich and taxpayers are still paying the price.
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>> moderator: why did you run this commercial, congressman boswell? boswell: you mean the t.a.r.p there was nothing illegal about that. >> moderator: the troubled assets relief program. boswell: that was the purpose. it is okay. according to the report but to preach and carry-on and then have the biggest investment for them to use it then preaching against it in not paying it back seems very disingenuous in that was not a good thing to do. >> moderator: is this affair? latham: no. anyone who looks at independently has said it is
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false. misleading. something the "des moines register" said if congressman boswell was to maintain any credibility in this race he should take it off the air. he voted for it to start with. -- allow me to continue please. he voted for it. by his own standard he talks about six times more and come. he has five times more with the same standards. it is really about being honest. someone who tried is to make up in issue.
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congressman boswell when is the last time you ran an ad that is not personal? >> moderator: i appreciate that question. boswell: i decided to do it history check i started in the business somebody at respected very much. very positive and up the. i look back at what latham had done. it is all negative. with the campaign we year-end close at 3 million negative against me. i will not take this lying down. that is not my nature. you have been negative owe your career. here's a situation it is the disingenuous to preach against it you think iowans don't realize where your major investment is? of course, you do. latham: of course, i know
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we're it is but i don't have any influence. boswell: that is not true to one on what basis? latham: congressman boswell voted for this. latham: congressman boswell voted for this. everyone has independently looked at it says he loses credibility in this race by continuing to run the ad. like his mode of operation i have been running positive ads all year long about what i believe about the future. notice he did not answer the question win in this the last time he ran a positive bad because he cannot remember how many cycles. that is unfortunate. this election to incumbents with voting records to
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compare with a stand on issues but instead he talks about personal attacks on the. >> moderator: let's move along to those issues. we solicited questions as far as is casey's cia it dealt with term limits. b.v. veteran not. congressman boswell you have had eight terms and congressman latham, nine terms how do you feel on and term limits from pamela davenport, raja gives a and four or five more people. to talk about the election let's talk about campaign reform but excuse me term limits. should members of congress have term limits? latham: if we could get it passed, we tried this in 1995. states came up with her own
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versions then on the ballot if you did not go exactly for that state then you have "the scarlet letter." it will be very difficult. for the state like iowa be want to turnover we only have four representatives in the house today. florida, california, new york. they could put all the chairmen and the ranking members we would have no way to have the chairman of the appropriations committee from iowa if term limits were in place the way it is set up today.
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boswell: it is not a bad idea. every two years read do have an election. people can decide. that we are a small state. we agree on something. i agree the large states would run everything. we need to take this very carefully. i have drafted a bill to go to the four year term was is the objection? the senators broke it is up or out to. talking to people with the four year and those in the middle with the constitution and amendment it would not change that feature. it would not have been a co-sponsors.
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that would be self-serving. >> moderator: i like to voluntarily short in your answers. turning to agriculture the government subsidize this crop insurance when yields are down but does offer that to other industries. one reader asks should farmers face the same risk as other businesses? boswell: we'll have a vested interest of agriculture so if you spend time with our friends you get something for this investment. the safest most plentiful and least expensive food in the world. we're not making more land. >> moderator: keeps subsidizing crop insurance? boswell: absolute the. latham: farmers today understand the national debt
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and going to contribute to reduce the spending in washington. to dramatically 18 gt counter cyclical programs that have been done for almost generations. they need a way to manage their risk. for the crop is self that is where we have to put our focus we are contributing to a great deal to deficit reduction willingly if we would have the assurance you could manage risk. >> moderator: livestock farmers complained they have to pay more money for corn but they have to sell the animals. boswell: the farm bill has provisions in there.
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we need the farm bill. of would hope your good friend the speaker would step up to the plate to bring that to the floor to one last farm bill that was passed was slightly over allocation the disaster provision was only four years out of the five-year bill. the year that was needed was no provision. so retroactively we will put that in place so they do have coverage this year. >> moderator: livestock producers amassed to have the fuel standard suspended temporarily to have lower prices for grain. would that do any good? boswell: i support the alternative fuels.
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even though a drought year it will be the top 10 for corn. >> moderator: would you keep there renewable fuel standard in place? latham: we had a very high a grain prices. because of the drought. the prices have moderated. while still high certainly i don't think the epa will change the standard. >> moderator: we have six minutes left. we have touched on the economy but closer is the federal deficit and said that. on the mind of many voters. what three specific cuts would you oppose and
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support? latham: with my a bill with transportation and head the largest percentage cut of any appropriation bills bills, over $4 billion. more importantly long-term i have a bill called the last government act to apply proven private sector management tools to the federal government for efficiency. we could reduce 25% of the administering the programs be much more efficient, this would be better to cut the deficit and then national debt than the individual programs. there is no incentive for efficiency with the federal government. boswell: for a specific i am a longtime soldier.
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i believe in a strong defense but we pay more for defense then all the countries of the world. we have to address that. the secretary of defense recommended that. secretary gates. i am on the eisenhower commission. he gave us instructions and about the military industrial complex. it needs to be a broad band. reroute of flak. strong defense absolutely. that is a place to start to bond excuse me. the pentagon is on schedule $4,307,000,000,000 of reductions right now. admiral mullen from the joint chiefs of staff said

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